From march 2011 you can't use paypal to store your squidoo or affiliate earnings to spend online. You can't use paypal(India) account to receive earnings more than 500$. In short all your online transactions will be from credit/debit card and no account balance.
thanks skyfire for letting me know about this. i have a squidoo account, but i rarely ever use it though. however, when i do use it again, i'll be sure to consider your advice and warning. thanks for the heads up.
Hi Stevennix2001, this new notice applies to india only.
One more bad news - payoneer cards are going to be useless as well for online purchase, after 1 march 2011. So that means you can only use the balance to move in your bank account.
Why the "WTF Government"? Paypal is a private company - or am I missing something.
Actually, this is the result of a long drawn "dispute" between PayPal, and RBI (the Indian central banking authority).
Though most of the PayPal are likely to react the same way (WTF), I don't think the government authorities are to be blamed. PayPal had it coming for more than a year, and they have only taken steps to ensure that they remain barely operational in India.
I'm not blaming paypal completely in this matter.
Indian government forced all the payment processors to stop holding funds 500$ or higher.
Paypal is going to restrict Indian users to keep account nil in 7 days irrespective of the amount received. Even 1$ sale from squidoo applies in this case. Considering bank clearance fees are 10$, it's going to be very rough on indian affiliates with this policy. One more important point is that paypal users can't save funds or use it to buy other services. All the transactions are going to be credit card/debit card dependent after march 1/2011. So affiliates with entropay.com virtual cards are in trouble as well.
I think it is wrong to blame RBI either.
Consider this scenario -
I have two PP accounts. A/c 1 is linked to my bank account - so it is visible to all the authorities in India. Whatever I earn thru this account - I have to pay taxes, plus the authorities can monitor the transactions. Why should the txns be monitored? For a number of reasons - money laundering / terrorism etc being the most obnoxious of them.
OK, now lets come to my other PP account - A/c 2. I conveniently forgot to connect it to any bank. Now, whatever I receive in this account, I can spend freely. I can even transfer it to any person for whatever purpose. And of course, I completely forgot about it when I filed my tax returns!
Now, let us talk about A/c 2 from the perspective of PayPal. Whatever amount stays deposited earns interest for PayPal, but not for me. That is iin contravention to a long standing RBI guideline that any deposit should pay interest to the account holder - even if it is 3.5% as in case of savings a/c.
In effect, PayPal is doing banking operations in India, without being subject to the banking laws. Should RBI allow that?
Now I'm beginning to understand. Thank you for explaining.
Ah that clears up some things, Sidd. Now let's see the aftermath of this dispute -
1. No chance of ever getting into ebay affiliate network (because ebay network owns paypal).
2. Not worth to be a ebay shop owner because if dispute arises then paypal will list the credit card in black list without actually going through the case (typical paypal horrors).
3. Paypal for india user accounts is equal to google checkout in terms of features. You can't store the money but only use it to buy or sell things with some percentage of fees using credit card. So in short, it's going to be useless.
4. Debit cards from india(irrespective of brands-Visa/MC) are not functional. So paypal account is useless for online purchase if anyone has debit card.
By the way sidd, have you checked service - entropay.com as paypal's current alternative ?
I don't think that should be the case. PayPal will continue accepting and processing payments to and from India. It will just stay what it is supposed to be, anyway, - a payment processing service. You can still make a payment using PayPal and your CC - you just cannot make it thru your PP account. Just because EBay owns PayPal should not be a reson to reject an applicant.
I think you have already noticed that EBay India uses an "Indianized" version of PayPal in India - PaisaPay
Well, in that case, take care that you don't sell too much .
As I said earlier - PayPal will just stay what it is actually - a payment processing service. It should not do banking functions - inadvertently or knowingly.
I think you are right.
No SF, I have not checked Entropay - I will now! Thanks!
I also believe that the current brouhaha notwithstanding, it is not the end for PayPal in India.
What are the changes, effectively? There are two -
1) PayPal a/c holders in India CANNOT keep any transfer in their accounts for more than 7 days - you HAVE to transfer it to your bank a/c in that period.
2) You CANNOT receive more than USD 500 in one go form the same source.
I think for a huge majority of PP users in India, these changes will not make any difference. The confusion is more due to improper understanding of what the current changes are. It is not as if PayPal is going to stop operating in India - at least not for now!
I guess I will just write a hub on this!
This one also looks more in favor of RBI and not paypal.
http://rbidocs.rbi.org.in/rdocs/Notific … SE1610.pdf
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